Prof. Zimmerman comments on attorney economics in fraud story

Adam Zimmerman, a law professor at Loyola Law School of Los Angeles said plaintiffs’ attorneys in a class-action case typically work on a contingency basis — meaning they are paid a stake of the money received by their client — and thus have to consider the risk involved in pursuing a case instead of settling.

“The longer you kind of go, financing litigation without the certainty of a return on that investment, the more and more risky it becomes for plaintiffs’ counsel,” Zimmerman said.

The expense of litigation weighs on both sides, of course, and Zimmerman cited the costs of discovery as a factor for defendants as well, saying those expenses sometimes lead to a “shotgun settlement” — one that is light on details and in which defendants don’t admit to wrongdoing.